4 Operations Management Flashcards
What is productivity?
the output measured against the inputs used to create it.
How do you calculate labour productivity?
Labour Productivity = Output over a given period of time/ Number of Employees
How can you increase productivity and efficiency?
- improve product quality and inventory
- automation
- improve employee training
- motivate employees
- introduce new technology
How do you calculate productivity?
Productivity = Output / Quantity of Input
What is buffer inventory?
the inventory held to deal with uncertainty in customer demand and deliveries of supplies.
What are the benefits to increasing productivity?
- reduced input needed for same output
- lower cost per unit
- fewer workers needed
- higher motivation
What is lean production?
techniques used by a business to cut down on waste and increase efficiency.
What are the types of wastes that can occur in production?
- Overproduction
- Waiting
- Transportation
- Unnecessary Inventory
- Motion
- Over-processing
- Defects
How can lean production be achieved?
- Kaizen
- JIT Inventory Control
- Cell production
What is kaizen?
a Japanese term meaning ‘continuous improvement’ through the elimination of waste.
What is Just-in-time (JIT)?
involves reducing the need to hold inventories of raw materials/ unsold inventories of the finished product.
What is cell production?
where the production line is divided into separate, self contained units making an identifiable part of the finished product.
What is batch production?
where a quantity of one product is made, then a quantity of another item will be produced.
What factors affect which method of production to use?
- product nature
- size of market
- nature of demand
- size of business
What is job production?
where a single product is made at a time.
What is flow production?
where large quantities of a product are produced in a continuous process.
What’re the advantages of new technology?
- increased productivity and efficiency
- increased job satisfaction
- need for more skilled workers
- better quality products
- quicker communication
- quicker decision making
What are the disadvantages of technology?
- unemployment increase
- expensive
- unhappy employees
- needs updating to remain competitive
What are fixed costs?
costs that do not fluctuate even if the output increases.
What are variable costs?
costs that vary directly with the number of output.
What is total cost?
fixed and variable costs combined.
What is the average cost per unit?
total cost of production / total output
What are economies of scale?
factors that lead to a reduction in average cost as the business grows in size.
What are diseconomies of scale?
factors that lead to an increase of average cost as a business grows beyond a certain size.
